PR Newswire | Jul 30, 2020 04:30PM EDT

07/30 15:30 CDT

Universal Logistics Holdings Reports Second Quarter 2020 Financial Results- Second Quarter 2020 Operating Revenues: $258.0 million, 32.7% decrease- Second Quarter 2020 Operating Income: $10.8 million, 64.7% decrease- Second Quarter 2020 Earnings Per Share: $0.23 per share WARREN, Mich., July 30, 2020

WARREN, Mich., July 30, 2020 /PRNewswire/ -- Universal Logistics Holdings, Inc. (NASDAQ: ULH), a leading asset-light provider of customized transportation and logistics solutions, today reported consolidated second quarter 2020 net income of $6.2 million, or $0.23 per basic and diluted share, on total operating revenues of $258.0 million. This compares to $20.0 million, or $0.70 per basic and diluted share, during second quarter 2019 on total operating revenues of $383.2 million. Included in second quarter 2020 results were $0.9 million of pre-tax holding gains, or $0.02 per share, on marketable securities due to changes in fair value recognized in income.

In the second quarter 2020, Universal reported operating income of $10.8 million compared to $30.7 million in the second quarter one year earlier. As a percentage of operating revenue, operating income margin for the second quarter 2020 was 4.2% compared to 8.0% during the same period last year. EBITDA, a non-GAAP measure, decreased by $18.0 million during the second quarter 2020 to $30.2 million, compared to $48.2 million one year earlier. As a percentage of operating revenue, EBITDA margin for the second quarter 2020 was 11.7% compared to 12.6% during the same period last year.

"Our performance during these unprecedented times once again highlights the resilience of Universal's business model," commented Tim Phillips, Universal's Chief Executive Officer. "With a substantial portion of our customer base shuttered during the peak of the COVID-19 pandemic, Universal was able to quickly adapt to a rapidly changing environment, adjust our operations to meet customer demands, and still report positive operating results. We were able to accomplish all of this while staying focused on the safety and well-being of our employees, contractors and customers.

"We're excited to see the resumption of North American manufacturing, particularly in the automotive and heavy-truck space, as well as improving demand for truckload transportation throughout the second quarter. While some of our Southern California intermodal operations struggled amid muted port volumes, we are optimistic that continued strength in retail sales will boost container volumes and cascade improvements throughout our network. Although it is difficult to predict the operating environment for second half of the year, we are generally pleased with the anticipated direction of our current operations and remain committed to controlling costs and scaling our services to support customer activity."

Operating revenues from truckload services in the second quarter decreased $24.3 million to $40.5 million, compared to $64.8 million for the same period last year. Included in truckload revenues for the recently completed quarter were $2.9 million in separately identified fuel surcharges compared to $7.0 million during the same period last year. The decrease in truckload services reflects a 40.7% decrease in the number of loads hauled, which was partially offset by a 6.8% increase in average operating revenue per load, excluding fuel surcharges. During the quarter ended July 4, 2020, Universal moved 36,445 loads compared to 61,423 during the same period last year.

Revenues for the second quarter 2020 from brokerage services decreased $26.6 million, or 29.8%, to $62.8 million compared to $89.4 million one year earlier. The decrease is primarily due to a 17.2% decrease in the number of brokerage loads moved and a 16.7% decrease average operating revenue per load. During the second quarter of 2020, Universal brokered 47,797 loads, compared to 57,710 loads during the same period last year.

Intermodal services revenues decreased $11.0 million to $82.9 million in the second quarter 2020, down from $93.9 million during the same period last year. Included in intermodal revenues for the recently completed quarter were $8.2 million in separately identified fuel surcharges compared to $11.6 million during the same period last year. The decrease in intermodal services reflects a decrease in the number of loads hauled, in addition to a decrease in the average operating revenue per load, excluding fuel surcharges. During the quarter ended July 4, 2020, Universal moved 156,779 intermodal loads, compared to 164,761 loads during the same period last year, while its average operating revenue per load, excluding fuel surcharges, fell by 3.0%.

Second quarter 2020 operating revenues from dedicated services decreased 49.7% to $18.0 million compared to $35.9 million one year earlier. Dedicated services revenues included $1.3 million in separately identified fuel surcharges in the second quarter 2020 compared to $4.3 million during the same period last year. During the second quarter of 2020, Universal moved 57,703 dedicated loads, compared to 151,755 loads during the same period last year. Universal's dedicated operations were substantially impacted by the shutdown of North American automotive manufacturing from the COVID-19 pandemic for several weeks during the quarter.

Overall, revenues from value-added services decreased during the second quarter 2020 to $53.8 million. This compares to $99.2 million from value-added services one year earlier. Operations supporting passenger vehicle programs declined due to plant shutdowns during the height of the pandemic and reduced output as production began to ramp up near the end of the second quarter. Value-added operations supporting heavy-truck production also decreased this quarter falling $20.6 million in the thirteen weeks ended July 4, 2020 compared to the same period last year. Both platforms were adversely impacted by the shutdown of North American automotive and heavy-truck manufacturing for several weeks during the period.

During the second quarter 2020, the transportation segment, which is primarily comprised of truckload, brokerage and intermodal services operations, reported operating income of $10.0 million on total operating revenues of $185.8 million. The transportation segment performed well during the period despite the depressed volumes experienced in each transportation service lines. In the logistics segment, which includes value-added and dedicated services, the shutdown of North American automotive and heavy-truck manufacturing for several weeks during the quarter adversely impacted results. For the second quarter 2020, income from operations in the logistics segment was $0.8 million on total operating revenues of $71.8 million.

As of July 4, 2020, Universal held cash and cash equivalents totaling $8.0 million, and $7.2 million in marketable securities. Outstanding debt at the end of the second quarter 2020 was $405.6 million and capital expenditures totaled $9.6 million.

Universal calculates and reports selected financial metrics not only for purposes of our lending arrangements but also in an effort to isolate and exclude the impact of non-operating expenses related to our corporate development activities. These statistics are described in more detail below in the section captioned "Non-GAAP Financial Measures."

Conference call:

We invite investors and analysts to our quarterly earnings conference call.

Quarterly Earnings Conference Call Dial-in Details:

Time:10:00 a.m. Eastern TimeDate:Friday, July 31, 2020Call Toll Free: (866) 622-0924International Dial-in:+1 (660) 422-4956Conference ID: 3877109

A replay of the conference call will be available beginning two hours after the call through September 4, 2020, by calling (855) 859-2056 (toll free) or +1 (404) 537-3406 (toll) and using conference ID 3877109. The call will also be available on investors.universallogistics.com.

About Universal:

Universal Logistics Holdings, Inc. is a leading asset-light provider of customized transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia. We provide our customers with supply chain solutions that can be scaled to meet their changing demands and volumes. We offer our customers a broad array of services across their entire supply chain, including truckload, brokerage, intermodal, dedicated, and value-added services.

Forward Looking Statements

Some of the statements contained in this press release might be considered forward-looking statements. These statements identify prospective information. Forward-looking statements can be identified by words such as: "expect," "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "future," "likely," "may," "should" and similar references to future periods. Forward-looking statements are based on information available at the time and/or management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. These forward-looking statements are subject to a number of factors that may cause actual results to differ materially from the expectations described. Additional information about the factors that may adversely affect these forward-looking statements is contained in the Company's reports and filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Statements of Income

(In thousands, except per share data)

Thirteen Weeks Ended Twenty-six Weeks Ended

July 4, June 29, July 4, June 29,

2020 2019 2020 2019

Operating revenues:

Truckload services $ 40,523 $ 64,846 $ 99,421 $ 130,517

Brokerage services 62,782 89,371 148,681 175,238

Intermodal services 82,881 93,853 193,203 185,021

Dedicated services 18,031 35,867 49,610 72,888

Value-added services 53,763 99,238 149,227 196,917

Total operating revenues 257,980 383,175 640,142 760,581

Operating expenses:

Purchased transportation and equipment rent 128,611 178,356 309,467 355,681

Direct personnel and related benefits 57,592 93,650 154,980 186,817

Operating supplies and expenses 16,962 30,737 47,657 61,507

Commission expense 5,024 7,858 12,194 15,694

Occupancy expense 8,984 9,859 17,815 19,143

General and administrative 6,580 9,633 15,504 18,874

Insurance and claims 4,858 4,951 9,730 11,303

Depreciation and amortization 18,530 17,415 38,048 34,333

Total operating expenses 247,141 352,459 605,395 703,352

Income from operations 10,839 30,716 34,747 57,229

Interest expense, net (3,438) (4,098) (7,647) (8,467)

Other non-operating income 811 96 (2,794) 1,049

Income before income taxes 8,212 26,714 24,306 49,811

Income tax expense 2,044 6,742 5,975 12,542

Net income $ 6,168 $ 19,972 $ 18,331 $ 37,269

Earnings per common share:

Basic $ 0.23 $ 0.70 $ 0.68 $ 1.31

Diluted $ 0.23 $ 0.70 $ 0.68 $ 1.31

Weighted average number of common shares outstanding:

Basic 26,919 28,383 27,074 28,382

Diluted 26,919 28,385 27,074 28,383

Dividends declared per common share: $ - $ 0.105 $ 0.105 $ 0.210

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

July 4, December 31,

2020 2019

Assets

Cash and cash equivalents $ 7,977 $ 7,726

Marketable securities 7,195 9,369

Accounts receivable - net 180,942 210,534

Other current assets 45,778 44,214

Total current assets 241,892 271,843

Property and equipment - net 350,346 339,823

Other long-term assets - net 371,187 376,331

Total assets $ 963,425 $ 987,997

Liabilities and shareholders' equity

Current liabilities, excluding current maturities of debt $ 209,462 $ 192,099

Debt - net 403,721 457,612

Other long-term liabilities 133,692 133,069

Total liabilities 746,875 782,780

Total shareholders' equity 216,550 205,217

Total liabilities and shareholders' equity $ 963,425 $ 987,997

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data

Thirteen Weeks Ended Twenty-six Weeks Ended

July 4, June 29, July 4, June 29,

2020 2019 2020 2019

Truckload Services:

Number of loads 36,445 61,423 93,132 122,515

Average operating revenue per load, excluding fuel surcharges $ 1,001 $ 937 $ 937 $ 938

Average operating revenue per mile, excluding fuel surcharges $ 3.61 $ 3.18 $ 3.24 $ 3.27

Average length of haul 277 295 289 287

Average number of tractors 1,320 1,525 1,373 1,576

Brokerage Services:

Number of loads (a) 47,797 57,710 108,849 111,319

Average operating revenue per load (a) $ 1,236 $ 1,484 $ 1,315 $ 1,501

Average length of haul (a) 599 642 607 641

Intermodal Services:

Number of loads 156,779 164,761 354,562 329,938

Average operating revenue per load, excluding fuel surcharges $ 485 $ 500 $ 491 $ 497

Average number of tractors 2,236 1,889 2,383 1,773

Number of depots 14 14 14 14

Dedicated Services:

Number of loads (b) 57,703 151,755 197,218 295,003



Excludes operating data from freight forwarding division in order to improve (a)the relevance of the statistical data related to our brokerage services and improve the comparability to our peer companies.

(b)Includes shuttle moves.

UNIVERSAL LOGISTICS HOLDINGS, INC.

Unaudited Summary of Operating Data - Continued

(Dollars in thousands)

Thirteen Weeks Ended Twenty-six Weeks Ended

July 4, June 29, July 4, June 29,

2020 2019 2020 2019

Value-added Services

Average number of direct employees 3,238 3,768 3,445 3,734

Average number of full-time equivalents 787 1,564 1,109 1,667

Number of active programs 55 49 55 49

Operating Revenues by Segment:

Transportation $ 185,831 $ 251,777 $ 440,504 $ 498,482

Logistics 71,794 131,160 198,836 261,559

Other 355 238 802 540

Total $ 257,980 $ 383,175 $ 640,142 $ 760,581

Income from Operations by Segment:

Transportation $ 10,035 $ 13,294 $ 22,138 $ 25,826

Logistics 750 17,339 12,440 31,159

Other 54 83 169 244

Total $ 10,839 $ 30,716 $ 34,747 $ 57,229

Non-GAAP Financial Measures

In addition to providing consolidated financial statements based on generally accepted accounting principles in the United States of America (GAAP), we are providing additional financial measures that are not required by or prepared in accordance with GAAP (non-GAAP). We present EBITDA and EBITDA margin, each a non-GAAP measure, as supplemental measures of our performance. We define EBITDA as net income plus (i) interest expense, net, (ii) income taxes, (iii) depreciation, and (iv) amortization. We define EBITDA margin as EBITDA as a percentage of total operating revenues. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, we are presenting the most directly comparable GAAP financial measure and reconciling the non-GAAP financial measure to the comparable GAAP measure. Set forth below is a reconciliation of net income, the most comparable GAAP measure, to EBITDA for each of the periods indicated:

Thirteen Weeks Ended Twenty-six Weeks Ended

July 4, June 29, July 4, June 29,

2020 2019 2020 2019

( in thousands) ( in thousands)

EBITDA

Net income $ 6,168 $ 19,972 $ 18,331 $ 37,269

Income tax expense 2,044 6,742 5,975 12,542

Interest expense, net 3,438 4,098 7,647 8,467

Depreciation 14,485 13,242 29,927 26,176

Amortization 4,045 4,173 8,121 8,157

EBITDA $ 30,180 $ 48,227 $ 70,001 $ 92,611

EBITDA margin (a) 11.7 % 12.6 % 10.9 % 12.2 %



EBITDA margin is computed by dividing EBITDA by total operating revenues (a)for each of the periods indicated.

We present EBITDA and EBITDA margin because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

EBITDA has limitations as an analytical tool. Some of these limitations are:

* EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; * EBITDA does not reflect changes in, or cash requirements for, our working capital needs; * EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; * Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and * Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA and EBITDA margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and only supplementally on EBITDA and EBITDA margin.

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SOURCE Universal Logistics Holdings, Inc.